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Saudi Exposure Hits Abu Dhabi; Dubai Remains Bullish
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10.1.2009 |
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DUBAI — UAE shares were mixed on Wednesday, with property stocks rising in both bourses, but banks dragged down Abu Dhabi after the emirate’s stock market regulator ordered banks to provide details of their exposure to two troubled Saudi groups.
Dubai-based contracting and engineering company Drake & Scull International surged a second day, gaining four per cent at Dh1.04 after winning a contract in Thailand.
Bellwether Emaar Properties, whose subsidiary in India, Emaar MGF, is seeking approval for a planned initial public offering, edged up by 2.5 per cent to Dh4.05. Aldar Properties in Abu Dhabi added 1.2 per cent at Dh6.13.
The main index of the Dubai Financial Market finished 1.3 per cent higher at 2,191.83, while the benchmark of the Abu Dhabi Securities Exchange was flat at 3,124.22. “Trading in Dubai will continue to be range-bound as there are no compelling catalysts yet to help the index break out of the 2,200 resistance point,” said Marwan Shurrab, chief trader at Gulfmena Alternative Investments. Speculative cash is what drove the Dubai bourse higher as investors hoped that the emirate will benefit faster than Abu Dhabi from a more rapid recovery, said Matthew Wakeman, managing director at EFG-Hermes.
Property firm Deyaar Development added 1.2 per cent to Dh0.85, while Union Properties rose by 2 per cent to Dh1.01. UAE’s biggest construction company, Arabtec Holding, climbed by 2.1 per cent to Dh0.85.
Emirate Integrated Telecommunications Company or du, the chief rival of Emirates Telecommunications Corp. or Etisalat, jumped by 3.9 per cent to Dh3.18.
Banks were in focus, with the Abu Dhabi bourse directing banks to disclose details of their exposure and consequent provisions for losses to the troubled Saudi groups, Saad and Algosaibi. The Saudi groups are undergoing a severe debt restructuring that is seriously threatening the stability of the regional banking system.
The Dubai stock exchange followed suit, requiring listed banks to submit similar details, and to announce provisions related to their exposure in their third quarter financial results.
“Moves for the UAE banks to be more transparent over exposure to bad loans can only be a good thing - as facts are much better for investors to work with than guesswork and as such full disclosure would draw a line in the sand,” said Wakeman of EFG-Hermes.
Emirates NBD, the country’s biggest bank by assets, rose by 1.2 per cent to Dh1.01. It said previosuly its exposure was immaterial.
Abu Dhabi Islamic Bank shed 0.3 per cent at Dh3.17, the bank did not comment on its exposure.
Untraded National Bank of Fujairah told the Abu Dhabi bourse that it has $15.2 million exposure to Bahrain’s Awal Bank and $10.2 million to Saudi Arabia’s Algosaibi Group. It took provisions of $6.5 million for Awal and $3.3 million for Algosaibi.
The National Bank of Abu Dhabi was steady at Dh13.55. It reiterated its July statement that it had $7.5 million in expsoure to Algosaibi, and $3.4 million to Saad.
Sharjah Islamic Bank fell by 1.7 per cent to Dh1.18 - its exposure to Algosaibi amounted to $15million, but said it had no exposure to Saad.
Abu Dhabi Commercial Bank lost 1.2 per cent to Dh2.44. Its exposure to the two groups reached $609 million as stated in a loan prospectus last September 17. First Gulf Bank edged down by 1.5 per cent toDh16.50.
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Source:www.khaleejtimes.com |
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